Toll Holdings (TOL)

Bank of America Merrill Lynch has downgraded its recommendation for
Toll Holdings
to “underperform", taking the view that a weaker-than-expected Australian economy would affect the logistics company.

Toll’s earnings before interest and taxes grew 3 per cent for the first half; consensus was expecting 6.7 per cent for fiscal 2013. BAML analysts say while the second half was cycling a soft comparison, it doubted it could generate the 12 per cent growth the sell side was predicting.

BAML lowered its fiscal EBIT growth forecast from 7.3 per cent to 5.1 per cent and its price objective from $5.75 to $5.50. Toll’s earnings per share were 37¢ in 2012. BAML forecasts EPS of 39¢ in 2013, 44¢ in 2014 and 48¢ in 2015.